Topic: CNSNews.com
A July 25 CNSNews article by Fred Lucas highlights President Obama's story that "after the initial efforts of the New Deal and it looked like the economy was growing again, FDR then presented a very severe austerity budget," after which "the economy started going down again." Lucas dug up anti-FDR author Jim Powell of the Cato Institute to respond:
“It’s a misleading analysis. The budget deficit during the Great Depression was such a tiny percent of the GDP, and because it was so small, it’s a hard case to make that these cuts cause the depression of 1938,” Powell, an adjunct fellow with the libertarian Cato Institute, told CNSNews.com.
No one grew the size of government, taxation and spending in peacetime the way Roosevelt did, Powell said.
“FDR tripled taxes and spending more than doubled from 1933 to 1940,” Powell said. “That was the biggest increase in peacetime spending in American history. Before that, the biggest increases in spending came during wars.”
Further, the New Deal did not bring the economy back and prolonged recovery, Powell said, as unemployment was still at 17 percent by 1940, before war spending began to pull the country out of the depression.
Lucas didn't mention that liberal economists such as Paul Krugman back up Obama's interpretation.
Lucas went on to claim that "Despite the $500 billion spent under FDR through various programs, the unemployment rate in the United States did not significantly decrease until after the U.S. officially entered World War II in 1941." Apparently, Lucas does not consider the decrease from 24.9 percent in 1933 to 14.3 percent in 1937 -- a near halving of the rate -- to be "significant." Further, the Bureau of Labor Statistics numbers he cites from that period did not count those in make-work programs to be "employed," so the actual unemployment rate was lower.
A single biased writer to attack the president does not constitute any sort of genuine fairness or balance on Lucas' part.
